The BARCODE Efficiency Act requires the IRS to use barcodes and scanning technology to digitize paper tax returns that were prepared electronically. It also requires optical character recognition for handwritten returns. These requirements apply unless technology proves slower or less reliable than manual processing.
Latest Action
Read twice and referred to the Committee on Finance.
AI Summary
Plain-English explanation of this bill
The BARCODE Efficiency Act requires the IRS to use barcodes and scanning technology to digitize paper tax returns that were prepared electronically. It also requires optical character recognition for handwritten returns. These requirements apply unless technology proves slower or less reliable than manual processing.
Last updated: 1/5/2026
Official Summary
Congressional Research Service summary
<p><strong>Barcode Automation for Revenue Collection to Organize Disbursement and Enhance Efficiency Act or the BARCODE Efficiency Act</strong></p><p>This bill requires the Internal Revenue Service (IRS) to use barcodes, barcode scanning technology, and optical character recognition (or similar) technology to digitize certain federal tax return information and correspondence, unless the technology is slower or less reliable than other IRS processes (subject to conditions). </p><p>Specifically, the bill requires a scannable barcode on electronically-prepared federal tax returns that are printed and filed in paper format with the IRS. The bill also requires the IRS to use barcode scanning technology to convert data included on such returns into an electronic format.</p><p>Further, the bill requires the IRS to use optical character recognition (or similar) technology to transcribe federal tax returns and correspondence received by the IRS that are not prepared electronically and are received in paper format.</p><p>However, under the bill, the use of barcodes, barcode scanning technology, and optical character recognition (or similar) technology is not required if (1) such technology is slower or less reliable than manual transcription or any other IRS process, and (2) the IRS provides a report to Congress regarding the determination to not use such technology.</p>
Key Points
Main provisions of the bill
Requires scannable barcodes on electronically-prepared paper tax returns
Mandates IRS use barcode scanning for digital conversion
Requires optical character recognition for handwritten returns
Includes exception if technology is slower than manual processing
Aims to modernize IRS paper processing systems
How This Impacts Americans
Potential effects on citizens and communities
The IRS would process paper tax returns more efficiently using modern scanning technology. Taxpayers could see faster processing and fewer errors from manual data entry of their returns.
Policy Areas
Primary Policy Area
Taxation
Scope & Jurisdiction
Jurisdiction Level
federal
Congressional Session
119th Congress
Citation Reference
452, 119th Congress (2025). "BARCODE Efficiency Act". Source: Voter's Right Platform. https://votersright.org/bills/118-s-452
